Italy Faces Struggle to Meet Kyoto Goals

Siniscalco told a parliamentary committee that it would cost Italy up to 3 billion euros ($3.9 billion) to comply with its Kyoto targets, adding that this cost was "contained."

However, despite the heavy outlays, he questioned whether the Protocol would fulfil its objectives.

"On the one hand the targets are probably insufficient to reverse the climate trend but from a purely quantitative point of view they are very ambitious," said Siniscalco.

The Kyoto Protocol, a United Nations treaty which limits the output of the gases blamed for causing global warming, is meant to be a first step in tackling the earth's growing output of carbon dioxide and other emissions.

Under the pact, Italy has to reduce its output of gases, especially carbon dioxide (CO2) from fossil fuels by 6.5 percent of 1990 levels by the period 2008-2012. In 2002 emissions were already 8.8 percent higher.

Although Kyoto is in theory legally binding, Siniscalco said he did not consider it a law. "I am convinced that Kyoto coming into force is not ... a law but a process, a direction in which we are walking," he said.

And in a remark that may concern those working on the European Union's nascent emissions trading market and want to ensure countries stick to the rules, he added: "It is not that we should take these targets too literally."

FLEXIBILITY

Siniscalco said Italy was unlikely to reach its goals through cuts alone and would probably have to use the Kyoto's "flexible mechanisms", such as the emissions trading scheme just launched in the Europe Union which allows firms to buy and sell the right to pollute.

He said Italy's emissions would be 576 million tonnes of CO2 in 2010, down from the 613 million tonnes they would have been without abatement measures. But that will still leave a shortfall from the target of 475 million tonnes.

"Therefore, unless things are renegotiated, ... we might need to use all the flexible mechanisms allowed in the protocol."

Italy estimated the cost of complying with Kyoto at 5.5 euros per tonne of carbon saved, Siniscalco said, adding that that was cheap compared to the expected value of a traded allowance on the EU emissions trading market.

"The foreseen costs are not costs for the Treasury but for the whole Italian system," he told parliamentarians. "It is reasonably contained between now and 2012."

Italy's environment minister said in December that Kyoto was unlikely to continue in anything like its current form at the end of its initial period in 2012, breaking ranks with official European Union policy.

Signatories are meant to sign up for greater reduction in a second five-year period after 2012 in a rolling process aimed at bringing emissions down to levels that will not affect the climate, considered to be at least a 60 percent global cut.

The United States, the world's biggest emitter, pulled out of the 1997 treaty in 2001 saying it would hurt the economy.